A brief history
African Dawn Capital Limited (the “Company”, “Afdawn” or “Group” ) was founded in 1998 as a micro finance business. Following its listing on the AltX in 2004, it grew into a niche finance provider specialising in micro finance, debtor discounting and structured property finance. As a result of its growth and corresponding increase in share price, Afdawn was able to acquire additional businesses and utilise shareholders’ funds to grow its loan books.
By 2009 the Group had significant exposure to the property sector, mainly property developments that it had funded. The financial position of the Group then weakened in 2009 due to the collapse in the property markets and the associated increase in doubtful loans. This not only impacted the Group but also the majority of its executive management who, based on the increase in the share price, had entered into a highly geared single stock structure with Nedbank. The falling Afdawn share price triggered margin calls by Nedbank which, when not settled, led to Nedbank exercising its security and thereby becoming the single biggest shareholder in Afdawn.
The majority of the executive directors were subsequently removed from the Board and from executive management. A new Board had to be constituted and called for a forensic review of the Company and a number of its subsidiaries.
The forensic review revealed fraud and mismanagement in Nexus and Afdawn. The investigation into these irregularities is still ongoing and management is co-operating with the various authorities in this regard.
The current position
During 2013, the company changed its vision to become an active investment holding company and to do so by acquiring shareholdings in entrepreneurial businesses. In pursuit of this new vision, in March 2014 the company acquired the requisite skill set through its acquisition of Knife Capital Proprietary Limited and secured some investment capital through a rights issue.
Further implementation of the new vision has however become challenging for reasons as detailed in the report from the Chair.